Correlation Between CNA Financial and American Financial
Can any of the company-specific risk be diversified away by investing in both CNA Financial and American Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CNA Financial and American Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNA Financial and American Financial Group, you can compare the effects of market volatilities on CNA Financial and American Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CNA Financial with a short position of American Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNA Financial and American Financial.
Diversification Opportunities for CNA Financial and American Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between CNA and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CNA Financial and American Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Financial and CNA Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CNA Financial are associated (or correlated) with American Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Financial has no effect on the direction of CNA Financial i.e., CNA Financial and American Financial go up and down completely randomly.
Pair Corralation between CNA Financial and American Financial
Considering the 90-day investment horizon CNA Financial is expected to generate 0.97 times more return on investment than American Financial. However, CNA Financial is 1.03 times less risky than American Financial. It trades about 0.05 of its potential returns per unit of risk. American Financial Group is currently generating about 0.04 per unit of risk. If you would invest 3,862 in CNA Financial on September 2, 2024 and sell it today you would earn a total of 1,182 from holding CNA Financial or generate 30.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNA Financial vs. American Financial Group
Performance |
| Timeline |
| CNA Financial |
| American Financial |
CNA Financial and American Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNA Financial and American Financial
The main advantage of trading using opposite CNA Financial and American Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNA Financial position performs unexpectedly, American Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Financial will offset losses from the drop in American Financial's long position.| CNA Financial vs. Selective Insurance Group | CNA Financial vs. Kemper | CNA Financial vs. Donegal Group B | CNA Financial vs. Argo Group International |
| American Financial vs. Selective Insurance Group | American Financial vs. Horace Mann Educators | American Financial vs. Kemper | American Financial vs. ProAssurance |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |